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The Australian Small Business Blog

Tuesday, April 19, 2011

Creating a Profit Machine

Are you taking home the wage you deserve? At the end of the week, at the end of the month, at the end of the year, is there enough left to justify all your hard work?

Working harder is not an option for most business owners. They are already putting in the hours, but they probably suspect that these hours are not as productive as they could be, and that they should be Working Smarter, not harder. In fact working less hours may be a better approach, if those hours are spent doing the right things.

Being successful in business is not a moon shot. After all, many other businesses have achieved the success that you are seeking for your business. There are basic principles to their success, a formula if you like. This formula is described in the following steps.

1. Decide where you want your business to be. Then analyse the profit structure of your business. Will it achieve your goals? Is your business really profitable? Does every sale make you money? Often there are hidden cross subsidies that drain your profits. Start with the end in mind – your profit objective. Build your desired wage into your invoices and ensure every sale truly adds to your bottom line.

2. Develop a marketing strategy to deliver your profit. Key to this is identifying your points of difference and the buyers who value them most. You are now in a position determine which marketing tactics will attract the best buyers to your business in a predictable, systematic way. Once they contact you, there must be a Sales Pipeline that takes the enquirer to a sale systematically and efficiently. This step alone could double your turnover.

3. Successful businesses have Business Systems so that work can be given to others to perform. This will ensure consistent quality and customer satisfaction, and will enable you to delegate work to others. Without these systems, your business cannot grow.

4. As more people are involved in your business, you must have in place People Systems so that everyone knows their role, and what a good job looks like. As part of this system, there is a reporting process so that the owner knows that a good job is being done even when they are not there. This makes it possible for their business to run without them.

5. Finally, there must be an implementation plan for all these strategies. Without action, even the best plans will end up on a bottom shelf gathering dust.